Diageo, the world’s largest producer of spirits, has reported a 15.8 percent increase in half-year net sales to £8 billion, driven by growth in all of its regions.
The owner of Gordon’s gin and Smirnoff vodka has reported broad-based growth across most categories, with particular strength in scotch, tequila, and beer.
Customers who stocked up during the pandemic often traded up to more expensive types of alcohol, which benefited the company. Premium product sales accounted for more than half of total net sales.
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Ivan Menezes, CEO of Diageo, stated that consumer demand in the off-trade channel has remained strong. Meanwhile, the company has benefited from the ongoing recovery of the on-trade channel, particularly in Europe, where net sales increased by 21%, and North America, where sales increased by 10%.
“I am very pleased with our financial results, which continue our strong growth momentum from fiscal 21.” “We delivered strong organic net sales growth across all regions and expanded operating margins,” Menezes said.
“Strong sales volume growth and continued premiumization drove an increase in organic operating margin during the first half.” This was accomplished while increasing our marketing investment to increase market share and support innovation, particularly in North America and Greater China.”
“We have made a strong start to fiscal 22,” Menezes continued. While we expect near-term volatility to persist, including potential Covid-19 impacts, global supply chain constraints, and rising cost inflation, I am confident in our ability to successfully navigate these disruptions through the rest of the year.”
